Cash For Clunkers: 5 Things You Didn’t Know

Cash For Clunkers: 5 Things You Didn't Know

It’s unlike anything the government has ever tried before and it will take some time to assess the results, but U.S. drivers now have the option to trade in their old gas-guzzling cars for more fuel-efficient vehicles. Instead of being handed a cup of burned coffee and a stale doughnut for the trade-in — or worse, having to pay for the cost of the car to be scrapped — the government is kicking in up to $4,500 toward the cost of a new car.

So, will it prime the pump effectively? Or is it just another boondoggle? A case of the government finding creative ways to blow a billion or so ($1 billion was spent in the programs first week) of tax payers hard-earned dollars?

As of Wednesday, August 5, the Senate finally agreed to infuse $2 billion more into the Cash for Clunkers program, which should last until Labor Day — so get moving on your trade-in. Until you do, check out five things you may not know about the Car Allowance Rebate Systems (CARS — who knew the government had a sense of humor?), better known as “Cash for Clunkers.”

1- Your clunker might not be clunky enough

In July 2003, Luis Grass of Havana converted a 1951 two-ton Chevy truck into a boat, loaded it with 11 of his family and friends and almost made the treacherous 90-mile journey across the Florida Strait to Miami. Cash for Clunkers would have done him no good, because it the truck was no longer a wheeled vehicle, and a ’51 Chevy wouldn’t have qualified as a clunker.

In order to qualify, your clunker must:

Have been manufactured less than 25 years ago (that eliminates Mr. Grass’ Chevy).

Must have a combined city/highway fuel economy of 18 miles per gallon or less.

Must be in drivable condition.

Must have been continuously owned and registered to the same owner for the full year.

So you can’t go to a scrap heap and push a bucket of bolts into a dealership in the hopes of cashing in on the $4,500. And you can’t use it if you’re driving an ‘87 Dodge Caravan, a ‘92 Jeep Cherokee or a ‘97 Chrysler Concorde.

Those are just three of the 164 cars whose fuel efficiency was upgraded at the last minute by the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency. Before you go to the dealer, check out www.cars.gov to see if your trade-in qualifies.

2- We stole the idea for Cash for Clunkers from Germany

Germany launched its version of Cash for Clunkers, known there as abwrackprämie (“wreck debate”) in February of this year. In the month of March, car sales in Germany were up 40% over the previous year prompting the government to extend the program through to the end of 2009. It’s earlier in our process, but so far Cash for Clunkers has been off to a similar hot start.

If Germany was hoping to give a boost to its domestic auto industry, then the results are a little disconcerting. So far the big winner has been Ford, with sales of its Fusion, Ka and Fiesta up 56% compared to a year ago. Results for BMW and Mercedes, with their focus on higher-end luxury models, haven’t been so great. This is one of the reasons American car makers lobbied hard to water down the mpg requirements for new purchases, fearing that the big benefactors would be those gas-sipping, decidedly nondomestic Hondas, Toyotas and Nissans.

There are three more things you didn’t know about cash for clunkers after the break…